Generation Less: How Australia is cheating the young

Generation Less: How Australia is cheating the young, by Jennifer Rayner (also now a book).

I find 20-­somethings living out an ever-extending adolescence as the building blocks for a stable, comfortable life slip further from their reach. I hear brittle laughter at black jokes about renting till 50 and retiring beyond the grave.

I see my generation becoming the first in more than 80 years to go backwards in work, wealth and wellbeing.

Economics editor of The Australian David Uren argues it is now harder for young people to get reliable, well-paid work than at any time in the past 20 years — and back then there was a vast recession on.

Many of the doorways that our parents and grandparents passed through on their way to full employment have been closed and bricked up for good. That’s because the world of work is changing; everyone knows this.

We feel it like an absence, a growing blank space at the centre of our economic life. The awareness seeps into those of us who’ve joined the job market more recently through the growing drought of permanent positions, the ceaseless hustle for that next contract role, the pressure to update skills we’ve only just attained. It is the product of structural and technological tides that no country can entirely levee against.

The most obvious and direct impact of underemployment is money; or rather, the lack of it. Having insufficient work means living payday to payday, with little or nothing left over at the end of each week to put aside. This leads to a reliance on credit cards to cover costs like uni books and bills, and loans when a car breaks down or a bond must be paid. Young Australians are carrying more debt than ever before. The escalating problem of underemployment is one reason so many of my peers can’t get ahead financially. …

The rise in underemployment and casual work among 20-­somethings (and to some extent, higher unemployment) stems from the loss of quality low-­skill white and blue collar jobs that gave many of our parents their pathway into the job market.

In May 2015 the Secretary of the Department of Prime Minister and Cabinet Martin Parkinson delivered the graduating address at the University of Adelaide:

My generation has failed you … despite having benefited from massive growth in living standards, income and wealth. We rode the benefits of others’ reform efforts, and thought that success was our doing.

In the process, we conflated self-­interest with national interest. We lost sight of the big picture and applauded the things that made me better off, irrespective of the cost to others in our community, or to future generations … your generation is at risk of being the first in modern history whose living standards will be lower than those of their parents … And the longer we wait to address today’s challenges … the greater the damage wilfully being done to future living standards.

Well Martin, there are some issues government could address:

  • Reduce the bureaucratic burden and risks of employing people. The market is routing around these artificial, government-imposed burdens, to the detriment of new and thus younger workers.
  • Reduce money supply growth and increase release of new land for housing. Our society can build cheap, good houses, but these artificial factors make them way too expensive.
  • Reconsider how we manufacture new money (including bank “credit,” that is, the stuff “in” bank accounts), because the rewards from new money and increasing financialization flow very lop-lopsidedly to those with more assets and the right jobs.
  • Make it easier to fire people, including bureaucrats, to clear deadwood.
  • Consider integrating the minimum wage with the welfare system so there can be flexible entry level wages, increasing employment.
  • Eliminate stamp duty on houses. It’s a dead weight reducing labor mobility, imposing a large inefficiency on the economy considering the revenue raised.